ELLIOTT WAVE ANALYSIS - Latest Market Commentary
28th May 2016 - The S&P is closing in on its April high of 2111.05. This was originally labelled as ending the 1st wave within a larger uptrend that began from last February’s low with the following downswing part of a corrective decline. We expect this to continue without breaking above the April high but should the unexpected occur, it would simply prolong the### five wave pattern from last February with upside objectives towards 2190.00+/-. This would result in a new record high but it would also allow a deep 2nd wave correction to begin. From empirical observation, 2nd wave corrections can be typically sharp and deep movements and this would be expected should the S&P extend to 2190.00+/-. This is because the 2190.00+/- level would result in an equivalent advance for European indices that would complete a counter-trend upswing from last February’s low at +7-8% above… Read full summary in our latest report!
28th May 2016 - The US$’s upside momentum remains intact as it is closing in on original interim resistance levels at the 96.00+/- area. Friday afternoon the US$ appreciated due to revisions of the Q1 U.S. growth data but a larger impact is expected from Janet Yellen’s speech at the Harvard University as it could give away some hints about the timing ###of the next interest rate rise. This is in tune with the possibility of a reversal-signature from the 96.00+/- area that would allow for a temporary pullback. The Euro’s decline likewise suggests a termination of the initial leg within a three price-swing decline unfolding from the 1.1617 high. A bounce higher is expected soon prior to additional declines in the subsequent weeks. Sterling staged a serious attempt to break the 1.4771 high of early-May but, so far, has not succeeded. Moreover, fib-price-ratio measurements point to…Read full summary in our latest report!
Bonds (Interest Rates)
28th May 2016 - The Federal Reserve Chairwoman Janet Yellen is addressing Harvard University late-session (Europe) on Friday although it is unknown whether she will make any hints about monetary policy. This follows on the back of earlier statements made last week by her colleagues’ Harker, Kashkari and Kaplan who echoed last month’s### FOMC statement that stated additional interest rate rises could be on the way. Patrick Harper even said that the mid-June policy meeting might trigger the next hike but this was dependent of the latest batch of economic data. Since details of last month’s FOMC ‘minutes’ were announced, long-dated yields have trended higher, the US$ dollar has traded sharply higher and stock markets have generally gained ground on the basis that any rate rise reflects a stronger U.S. economy. The Q1 ’16 second revision of GDP was announced Friday with an upward gain of 3/10’s of a point to 0.8%. This was slightly lower than consensus forecasts of 0.9% but in all, a stronger figure on the basis of a pick –up in residential investment and exports. Our medium-term Elliott Wave forecasts for GDP indicate a stagnation this year, Read full summary in our latest report!
28th May 2016 - As gold broke above the March high of 1282.88 in early-May to 1303.81, it coincided with a significant increase in bullish sentiment. This was widely reported in recent updates as the CFTC’s Commitment of Traders Report (COT) highlighted### extreme levels of large speculative longs. This accompanied several investment bank analysts to turn bullish, advising clients to begin buying. These contrarian indicators proved invaluable but only in conjunction with the Elliott Wave analysis that projected a terminal high within an evolving counter-trend expanding flat pattern. The statistics and the pattern proved correct with gold’s sustained decline by almost $100.00 dollars since. It was no coincidence that the US$ index was also forming a synchronised low in early-May. This has since pushed significantly higher enough to influence gold… Read full summary in our latest report!